On January 7, GLONGHUI announced that YEAHKA (09923.HK) proposed to issue and place 19.15 million shares to raise additional funds from external investors to develop the group's overseas and AI Business. In light of this, the following arrangements have been made: On January 6, 2025, the company, the Placing Seller (i.e., Creative Brocade International Limited), and the Placing Agent (i.e., CITIC SEC) entered into a placing and subscription agreement, under which, (i) the Placing Seller agrees to sell and the Placing Agent agrees (acting as the agent of the Placing Seller) to use their best efforts to procure the purchase of the 19.15 million placing shares held by the Placing Seller at the price of HKD 10.10 per share; and (ii) the Placing Seller conditionally agrees (acting as the lead person) to subscribe at a price equal to the placing price, while the company conditionally agrees to issue 19.15 million subscription shares.
The shareholding of the Placing Seller in the company will be diluted from approximately 36.17% of the company's issued share capital as of the date of this announcement to about 31.85% immediately following the completion of the placing, and will increase to approximately 34.67% of the enlarged issued share capital of the company immediately following the completion of the subscription, thereby triggering a mandatory general offer obligation under Rule 26 of the Takeover Code (except where exemptions have been granted by the Executive). The Placing Seller has applied to the Executive for a waiver of the obligation to make a mandatory general offer under Rule 26 of the Takeover Code due to the subscription.
The total amount of funds raised from the subscription is expected to be approximately HKD 0.1934 billion. The net proceeds from the subscription, after deducting all applicable costs and expenses (including commissions, professional fees, and out-of-pocket expenses), are estimated to be approximately HKD 0.1892 billion. The company intends to use about 40% or HKD 75.7 million of the net proceeds for expanding the group's overseas footprint in various Business segments in Asia; about 40% or HKD 75.7 million of the net proceeds is planned for investment in R&D, including the use of AI in proprietary Software to enhance the competitiveness of the group's commercial digital ecosystem; and about 20% or HKD 37.8 million is planned for working capital and general corporate purposes.
